Emergency Budget: Osborne blames Labour for cuts and taxes
CHANCELLOR George Osborne today announced a VAT hike to 20% in an emergency Budget packed with spending cuts and tax rises.
And he placed blame for the pain clearly at the door of the last Labour government, saying: “The years of debt and spending make this unavoidable.”
He promised to balance Britain’s books within five years as he used today’s emergency Budget to rip into the inheritance left by Labour.
The key points were:-
* VAT to rise to 20% from 17.5% in January 2011
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* Public sector pay to be frozen for two years for those earning over �21,000
* Tax credits payments to families earning over �40k to be reduced
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* Child benefits to be frozen for three years
* A medical assessment will be applied to new disabilities living allowance claimants from 2013
* Corporation Tax to be cut for both large and small businesses
* New bank levy to be introduced, which is expected to raise �2 billion a year from 2011
* No new increases in duties on alcohol, tobacco or fuel
* Income tax threshold to rise by �1,000
Mr Osborne also said government departments whose budgets have not been ring-fenced would face spending cuts of 25%.
There was a sweetener when he confirmed widely trailed plans to raise personal allowances for basic rate tax payers by �1,000 to �7,475 from next April, taking 880,000 of the lowest paid out of income tax altogether.
He also announced that from April next year the link between the basic state pension and earnings would be re-established.
But acting Labour leader Harriet Harman condemned the Budget,
She said: “This is a Tory Budget that will throw people out of work, that will hold back economic growth and will harm vital public services.
“It’s the same old Tories.”
- What do you think? Will you be hit by the cuts or taxes revealed in today’s Budget? Let us know by leaving a comment below.